---
kind: "range"
citation: "26 C.F.R. §§ 301.6316-3–301.6316-5"
title: "26"
from: "301.6316-3"
to: "301.6316-5"
count: 3
url: "https://uscodex.org/cfr/26/301.6316-3..301.6316-5"
---

# §301.6316-3. Allocation of tax attributable to foreign currency.

- (a) **Adjusted gross income ratio.** The portion of the tax which is attributable to amounts received in nonconvertible foreign currency shall, for purposes of applying [§ 301.6316-1](/cfr/26/301.6316-1.md) to the currency of each foreign country, be the amount by which:
  - (1) The amount which bears the same ratio to the entire tax for the taxable year as (i) the taxpayer's adjusted gross income received in that currency bears to (ii) the adjusted gross income determined under [section 62](/cfr/26/62.md) by taking into account the entire gross income and all deductions allowable under that section without distinction as to amounts received in foreign currency, exceeds
  - (2) The total of the allowable credits against tax, and payments on account of tax, which are properly allocable to the amount of that currency included in gross income.
- (b) **Example.**
  - (1) **For the calendar year 1955 Mr.** Jones and his wife filed a joint return on which the adjusted gross income is as follows, after amounts received in foreign currency had been properly translated into United States dollars for tax computation purposes:
  - (2) The following amounts are allowable as properly deductible from adjusted gross income, no determination being made as to whether or not any part of them is properly allocable to the Fulbright grant:
  - (3) For the taxable year the following amounts are allowable as credits against the tax, or as payments on account of the tax:
  - (4) The portion of the tax which is attributable to amounts received in nonconvertible foreign currency is $33.49, determined as follows:

# §301.6316-4. Return requirements.

- (a) **Place for filing.** A return of income which includes amounts received in foreign currency on which the tax is paid in accordance with [§ 301.6316-1](/cfr/26/301.6316-1.md) shall be filed with the Director of International Operations, Internal Revenue Service, Washington, D.C. 20225. For the time for filing income tax returns, see sections [6072](/cfr/26/6072.md) and [6081](/cfr/26/6081.md) and §§ [1.6072-1](/cfr/26/1.6072-1.md), [1.6081-1](/cfr/26/1.6081-1.md), and [1.6081-2](/cfr/26/1.6081-2.md) of this chapter (Income Tax Regulations).
- (b) **Statements required.**
  - (1) A statement, prepared by the taxpayer, and certified by the foundation, commission, or other person having control of the payments made to the taxpayer in nonconvertible foreign currency, shall be attached to the return showing that for the taxable year involved the taxpayer is entitled to pay tax in foreign currency in accordance with [section 6316](/cfr/26/6316.md) and the regulations thereunder. This statement shall disclose the total amount of grants or compensation received by the taxpayer during the taxable year under the authority of section 32(b) of the Surplus Property Act of 1944, as amended (50 U.S.C. App. 1641(b)(2)), or of the Mutual Educational and Cultural Exchange Act of 1961, as amended ([22 U.S.C. 2451](/usc/22/2451.md)), or section [104 (h)](/cfr/26/104.md?p=h), [(j)](/cfr/26/104.md?p=j), [(k)](/cfr/26/104.md?p=k), [(o)](/cfr/26/104.md?p=o), or [(p)](/cfr/26/104.md?p=p) of the Agricultural Trade Development and Assistance Act of 1954, as amended (7 U.S.C. [1704 (h)](/usc/7/1704.md?p=h), [(j)](/usc/7/1704.md?p=j), [(k)](/usc/7/1704.md?p=k), [(o)](/usc/7/1704.md?p=o), [(p)](/usc/7/1704.md?p=p)), and the amount thereof paid in nonconvertible foreign currency. It shall also state that with respect to the grant or compensation the applicable percentage requirement of [§ 301.6316-1](/cfr/26/301.6316-1.md) is satisfied.
  - (2) The taxpayer shall also attach to the return a detailed statement showing (i) the computation, in the manner prescribed by [§ 301.6316-3](/cfr/26/301.6316-3.md), of the portion of the tax attributable to amounts received in nonconvertible foreign currency and (ii) the rates of exchange used in determining the tax liability in U.S. dollars. See [paragraph (c)](/cfr/26/301.6316-5.md?p=c) of § 301.6316-5.

# §301.6316-5. Manner of paying tax by foreign currency.

- (a) **Time and place to pay.** The unpaid tax required to be shown on a return filed in accordance with [§ 301.6316-4](/cfr/26/301.6316-4.md), whether payable in whole or in part in foreign currency, is due and payable to the Director of International Operations, Internal Revenue Service, Washington, D.C. 20225, at the time the return is filed. However, see [paragraph (d)](#d) of this section with respect to the depositing of the foreign currency with the disbursing officer of the Department of State.
- (b) **Certified statement.** Every taxpayer who desires to pay tax in foreign currency under the provisions of [§ 301.6316-1](/cfr/26/301.6316-1.md) shall first obtain the certified statement referred to in [paragraph (b)(1)](/cfr/26/301.6316-4.md?p=b-1) of § 301.6316-4.
- (c) **Determination of the tax.** In determining the tax payable for the taxable year in U.S. dollars, the taxpayer, with respect to amounts described in [paragraph (a)](/cfr/26/301.6316-1.md?p=a) of § 301.6316-1, or amounts described in [paragraph (b)](/cfr/26/301.6316-1.md?p=b) of § 301.6316-1 received before November 1, 1965, shall use the rates of exchange which most clearly reflect the correct tax liability in dollars, whether it be the official rate, the open market rate, or any other appropriate rate. With respect to amounts described in [paragraph (b)](/cfr/26/301.6316-1.md?p=b) of § 301.6316-1 received on or after November 1, 1965, the taxpayer shall use the official rate of exchange in determining the tax payable for the taxable year in U.S. dollars. After determining the correct tax liability in U.S. dollars the taxpayer shall then ascertain, in accordance with the principles of [§ 301.6316-3](/cfr/26/301.6316-3.md), the portion of the tax which is attributable to amounts received in nonconvertible foreign currency.
- (d) **Deposit of foreign currency with disbursing officer.**
  - (1) After the portion of the tax which is attributable to amounts received in nonconvertible foreign currency is determined in U.S. dollars, the amount so determined shall be deposited in the same nonconvertible foreign currency with the disbursing officer of the Department of State for the foreign country where the fund is located from which the payments in nonconvertible foreign currency are made to the taxpayer. The amount of foreign currency to be deposited shall be that amount which, when converted at the rate of exchange used on the date of deposit by that disbursing officer for the acquisition of such currency for his official disbursements, equals the portion of the tax so determined in U.S. dollars.
  - (2) The disbursing officer may rely upon the taxpayer for the determination of the amount of tax payable in foreign currency but may not accept any such currency for deposit until the taxpayer has presented for inspection the certified statement referred to in [paragraph (b)(1)](/cfr/26/301.6316-4.md?p=b-1) of § 301.6316-4. Upon acceptance of foreign currency for deposit the disbursing officer shall give the taxpayer a receipt in duplicate showing the name and address of the depositor, the date of the deposit, the amount of foreign currency deposited, and its equivalent in U.S. dollars on the date of deposit.
  - (3) Every taxpayer making a deposit of foreign currency in accordance with this paragraph shall attach to the return required to be filed in accordance with [§ 301.6316-4](/cfr/26/301.6316-4.md), in part or full payment of the taxes shown thereon, the original of the receipt given by the disbursing officer and shall pay to the Director of International Operations in U.S. dollars the balance, if any, of the tax shown to be due. Tender of such receipt to the Director of International Operations shall be considered as payment of tax in an amount equal to the U.S. dollars represented by the receipt.
  - (4) A taxpayer shall make the deposit required by this paragraph in ample time to permit him to attach the receipt to his return for filing within the time prescribed by section [6072](/cfr/26/6072.md) or [6081](/cfr/26/6081.md) and §§ [1.6072-1](/cfr/26/1.6072-1.md), [1.6081-1](/cfr/26/1.6081-1.md), and [1.6081-2](/cfr/26/1.6081-2.md) of this chapter (Income Tax Regulations).